Premier Wen Jiabao <http://topics.bloomberg.com/wen-jiabao/>’s government raised borrowing costs twice last year and may take measures to “guard against asset- price increases, strained local government finances and a buildup of non-performing loans in the banking system,” the Washington-based lender said. China has considerable scope for more rate increases, Vikram Nehru, the bank’s chief economist for East Asia and the Pacific, said in Beijing today.
Inflation in China accelerated to 5.1 percent in November from a year earlier, the fastest pace in 28 months, driven by higher food costs. The benchmark one-year deposit rate stands at 2.75 percent, while the lending rate is 5.81 percent. The bank expressed concerns about the possibility of so- called asset bubbles in the East Asia and Pacific region, whose largest economies include China, Indonesia <http://topics.bloomberg.com/indonesia/>, Thailand<http://topics.bloomberg.com/thailand/>and Malaysia <http://topics.bloomberg.com/malaysia/>. http://www.bloomberg.com/news/2011-01-13/china-economy-may-grow-8-7-this-year-slowing-from-10-world-bank-says.html
